Government expected to decide on AIB flotation after French vote

Bank paves way for IPO by submitting prospectus to Central Bank

AIB completed a so-called non-deal international roadshow with analysts and investors in Frankfurt on Thursday. Photograph: Cyril Byrne

AIB completed a so-called non-deal international roadshow with analysts and investors in Frankfurt on Thursday. Photograph: Cyril Byrne

 

State-owned AIB is liaising with the Central Bank on a prospectus for its long-awaited return to the main Irish and London stock exchanges in the coming months, though the Government is likely to await the outcome of the French presidential election in May before making a final call.

Sources said AIB has filed a prospectus in recent months and has updated it on a number of occasions since then, most recently with the inclusion of full-year figures, which were reported in early March.

The bank posted a €1.7 billion pretax profit in 2016 and has proposed the payment of a €250 million dividend, its first since the financial crisis began in 2008.

AIB, led by chief executive Bernard Byrne and chief financial officer Mark Bourke, completed with its advisers a so-called non-deal international roadshow with analysts and investors in Frankfurt on Thursday, according to sources. The process started when AIB held a capital markets day in London on March 9th and continued in North America during the week of St Patrick’s Day.

A spokesman for the Department of Finance declined to comment on the prospectus or the current state of the process. Spokeswomen for AIB and the Central Bank also declined to comment.

Two opportunities

While the Minister for Finance, Michael Noonan, has said there are two opportunities to sell a 25 per cent stake in AIB on the market this year – in May-June or the autumn – sources said momentum is currently pointing towards a deal in the earlier window.

With financial markets having been caught off-guard by the outcome of the Brexit referendum and US presidential Donald Trump’s election last year, the upcoming French election is being seen as a key geopolitical event that will dictate near-term market sentiment. Polls currently point to far-right presidential candidate Marine Le Pen losing to centrist Emmanuel Macron in a run-off election on May 7th.

The sale of a 25 per cent stake in AIB is expected to raise about €3 billion, as the Government continues to recoup the €20.8 billion cost of rescuing the bank between 2009 and 2011. However, Mr Noonan has said it could take up to a decade before the lender is fully privatised. The bank has so far repaid about €3.3 billion by redeeming preference shares and contingent capital notes issued to the State during the crisis.

The Department of Finance appointed a number of additional financial groups to help run the initial public offering of AIB in recent weeks, including Citigroup, Goldman Sachs, Goodbody Stockbrokers and UBS, with Investec named as a co-lead manager. In December, the department hired Bank of America Merrill Lynch, Davy and Deutsche Bank as joint global co-ordinators and bookrunners for the potential deal.